Kiwibank profit hits $100 million

Kiwibank profit hits $100
million Kiwi Group Holdings Limited
(“KGH”), which includes Kiwibank Limited and associated
companies involved in Wealth Management, Insurance and New
Zealand Home Loans, has achieved an after tax profit of $107
million for the year ended 30 June 2014.The bulk of the
profit was made up by the Kiwibank Banking Group
(“Kiwibank”) which achieved an after-tax profit of $100
million, an increase of three per cent over the previous
year’s profit of $97 million.Kiwibank Chief Executive
Paul Brock said the underlying performance was very
encouraging and emphasised the increasing contribution of
the financial services group to the overall performance of
the New Zealand Post Group.

Focusing on the bank’s
performance, Mr Brock said loans and deposits showed healthy
growth with the bank increasing market share in its key
markets. There has been solid revenue growth and margin
improvement along with investments into a new core banking
system, the retail network and digital initiatives which
have increased costs. This issue is being addressed with an
internal restructure designed to improve both customer
service and productivity and reduce costs.

In the last
year, Kiwibank: • Increased loans and advances by
10.6% from $13.2 billion to $14.6 billion • Increased
customer deposits by 5.8% from $12.1 billion to $12.8
billionMr Brock said the bank was now at an important
stage of its growth. “After only 12 years of trading we
have about 860,000 customers in what is a very competitive
market.

This brings with it special challenges to ensure
we maintain profitable growth as well as continuing to
provide excellent customer service and that we operate where
our customers are – both face to face and in an
increasingly digital world.

This means we must continually
look at how we do business including how we manage our
costs. We are meeting this challenge head-on and I look
forward to steadily improving results in the coming
years.”

Mr Brock said there will be significant new
investment in the bank’s infrastructure with approximately
$100 million being spent over the next four years upgrading
the core banking system.

Significant events during the
financial year included the announcement of a new regional
office in Hastings creating employment opportunities in that
region.

“This project is a key part of our business
continuity programme to ensure that there would be no
disruption to banking services should there be a sustained
service outage in Auckland or Wellington. Refurbishment is
well underway and the site is expected to be operational by
late November.”

Mr Brock said investor confidence in the
bank was reinforced with a successful capital note offer in
May. The issue raised $100m and contributed to a total
capital ratio of 12.9% at the end of
June.

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